Muthoot Fincorp picks nearly 1% stake in BankBazaar for Rs 15 crore

Muthoot Fincorp has made a strategic investment in BankBazaar by picking up around 1 per cent stake for Rs 15 crore in the latter’s Series D2 round of fundraise to strengthen its digital platform.

 

This deal values BankBazaar around Rs 1,700 crore.

 

BankBazaar is also making an entry into the secured gold loan market in partnership with the gold loan focused NBFC.

 

Under the partnership, BankBazaar will handle digital data management, digital marketing, product education, digital customer experience, credit score improvement via prudent financial literacy, and consumer education. Muthoot FinCorp will manage KYC compliance, verification, valuation, storage, loan disbursement and all other guidelines ensuring same-day loan disbursement via a seamless phygital lending experience.

 

“By the end of the quarter, I think it should be all in place between May and June. Consumers can start their journey digitally and all the KYC, all those start the journey online from an inquiry and then in the branch. There are various products available in gold loan. So, the offerings would be available in the BankBazaar platform as well,” Shaji Varghese, chief executive officer (CEO) of Muthoot FinCorp.

 

Muthoot FinCorp offers more than two dozen products and services and has over 3,700 branches across the country. As of December 31, 2024, the company’s overall loan assets stood at roughly around Rs 26,000 crore.

 

In this round of funding, the company will raise around Rs 55 crore from internal and other investors as well, including Walden International and a few others.

 

“We have a mix of internal and external. One of the main things we want to do with this round is diversify and build out our whole loan product. Also, the company is growing quite well. Our core business till now has been co-branded credit cards. We have seen a 62 per cent growth in co-branded credit cards in FY24. We are expecting a compound annual growth rate (CAGR) of about 46 per cent in top-line growth (between FY22 and FY25) and we are expecting a bit of profitability this year,” said Adhil Shetty, CEO, BankBazaar.

 

The company, with a customer base of over 67 million users, already has investors such as Experian, Eight Roads, Peak XV (formerly Sequoia), WSV, & Amazon.